We hope you are well and that 2022 is treating you nicely! We are already more than a third of the way through 2022 and there have been a lot of changes since our last update.
London Rental Market
In December 2021, the rental market saw a 25% increase in tenant enquiries and a 69% decrease in the number of properties available to rent compared to December 2020. Similarly, data released from Savills in December 2021 revealed that rents had gone up by 8.9%. Figures released recently by Rightmove show that the London market concluded the first financial quarter of 2022 with an average rent inflation of 2.4%, making the annual increase in London (based on this time last year) 14.3%+. The good news is that, whilst the rate of inflation is starting to taper off, the rental market remains buoyant as we progress through Q2 of 2022.
However it is important to note that the current upward trend in the market can’t continue forever and, with the rate of increase beginning to slow, we expect that rents will stabilise before the year end. In addition, there are a number of factors which could further slow down the rental market in the latter half of this year. In the first place, inflation rates rose to 5% in the winter of 2021, and are predicted by the Bank of England to reach about 6% by spring 2022. In February 2022, the Bank of England raised base rates from 0.25% to 0.5% accordingly – to try to tackle the rise in inflation. These were then raised again in March to 0.75% (making it three raises in three months). These changes, along with an average increase in energy prices for many households of £693 means that we are likely to see renters hitting a ceiling in prices soon as rents will start to outstrip affordability without significant salary inflation. In light of this, our professional advice to our clients is to take advantage of the exceptional market while it lasts, but also be aware that a cooler market is inevitably going to follow this peak.
As I’m sure you are aware, there have been significant global developments with regards to the ongoing, tragic war in the Ukraine. It is not yet completely clear how the unfolding situation will affect business within the property sector. Thus far, the impact appears to be minimal but this could change as the situation develops. We will keep a close eye on this over the coming weeks and months. It is important to keep in mind though that these kinds of economic situations tend to reduce buyer confidence. In addition, the economic impact of global sanctions on Russia, and the unfolding energy crisis associated with the war add pressures to an already volatile market and further negative changes may tip the scale towards a fall in the property market.
Our office is proud to have been awarded the exceptional standard for lettings by the Best Estate Agent Guide for 2022, for the second year in a row. This again places us in the top 5% of letting agents in the UK for marketing, customer service and results.
The Best Estate Agent Guide is an independent list of the best estate agents in the country. Over 15,000 agents are assessed each year and only the very best agents are listed. Emma’s is proud to be officially accredited.
We are excited to finally announce that our website has re-launched with a snazzy new look at emmasestateagents.co.uk. We believe it’s essential to provide our clients with relevant and current information. We have therefore worked hard to improve clarity of information, functionality and have also introduced a blog page where we will be posting regular industry, business and local updates, in the hopes that the information might prove interesting and useful.
New Team Members
We are also pleased to announce that we have expanded our core team here at Emma’s. This has given us an even greater capacity than before to ensure that expectations and needs are met and that issues are resolved swiftly and efficiently. We can therefore promise to continue to provide you with nothing but the best possible service.
In September 2021, we had the pleasure of welcoming a new team member, Joel, who joined us from HMRC. Joel grew up in South London and has slotted into the Emma’s family seamlessly – many of you will have already spoken to him on the phone or by email already. We also expanded our team further in January 2022, when Imogen (Michelle’s youngest daughter) joined us full time after graduating from Durham University, thus continuing the family legacy.
Emma’s x Ease Partnership
At Emma’s we endeavour to support local, independent businesses whenever we can which is why we are so excited to announce our first ever partnership with ease. Ease is an independent, eco-conscious, local candle business run by Alice who hand pours all her candles in South West London. As part of our partnership with ease, we would like to offer all our clients an exclusive 10% discount on all ease products by using the discount code EMMA10 at easelondon.co.uk.
Legislation is constantly being introduced and amended within the property industry and we will ensure that you are kept up-to-date as and when necessary, however we would like to provide you with a brief summary of some of the important legislation that is coming into place or is potentially on the cards.
Right to Rent
The government is implementing changes with regards to right to rent checks. Please rest assured that our team is fully briefed on this and will continue to make sure that these checks are carried out in line with government legislation and to the highest possible standard. Read the full Right to Rent blog.
At present, ‘the minimum energy efficiency standards (MEES) allowed for rented properties are a minimum of an E rating on their Energy Performance Certificate (EPC).’ New EPC legislation which would raise the mandated rental property EPC requirement to a certification rating of C or above is in consideration for introduction in 2026. From this date, landlords would be prohibited from entering into new rental contracts if their property did not meet the minimum requirement of an EPC rating of C or above. The proposed deadline for upgrading the EPC rating on existing lets is 2028. The proposal states that those who fail to meet these deadlines could face fines of up to £30,000. This would have very serious consequences for a large majority of landlords.
Under existing legislation, you are only required to spend up to £3,500 in attempts to raise the EPC rating to an E or above before you can apply for an exemption. The new legislation would raise this to £10,000. Landlords would therefore be mandated to spend up to £10,000 to raise the EPC rating to a C or above before they could apply for an exemption. At present, both the legislation and its specific terms are not finalised, however it is likely that if this legislation were to come into effect, you would be able to back-date some improvement costs to contribute towards the £10,000.